This house in Bahan township is priced at about K880 million and is one that industry sources say is tipped to rise in value by 20 percent in the coming year. Pic: Lwin Maung Maung

REAL estate agents in Yangon say they have high expectations that the luxury property market will grow strongly in the coming year because taxes on the sector have been reduced.

U La Win Tun, marketing manager of Asia Land real estate agency, predicted that prices for expensive properties are likely to rise this year.

“I think that properties ranging from K500 million to K1 billion in destinations like Dagon, Chinatown, Mingalar Taung Nyunt, Sanchaung, Kamaryut, Yankin and Mayangone townships might increase in value by as much as 20 percent this year,” he said.

He said increased demand for properties and houses that can be used for residential and business purposes is forcing prices up.

“For houses in this price range we often find that the buyers are have more than purely residential purposes in mind – they’re often looking to base a business there too,” he said.

U La Win Tun added that for people who have the money to spend such houses are a safe investment that offers stronger guarantees than gold, cash or cars, with the added benefit that they can live in them too.

And while high-end property prices are – in U La Win Tun’s opinion – likely to increase this year, he said that land values for in several hot spots are also on the way up. “On Pyay road, 1 square foot of land is now worth K120,000 but six months ago the same piece of land would only have sold for K80,000-100,000 a square foot,” he said.

Other hot spots include real estate along the Dhammazedi, Inya and Kaba Aye Pagoda roads where buyers traditionally seek the most visible locations.
Daw Nan Than Yee, manager of Pan Tha Khin real estate agency, said she also expects top-end property prices to increase.

“All the indications I’ve seen suggest that the prices of high-end properties (over K500 million) in Yangon’s best locations will increase by about 20 percent in this year,” she said.

She agreed that the tax reductions announced by the government in August 2007 are playing their part to push up prices.

“Buyers only have to pay 15 percent taxes on these properties, which is one strong reason why people are interested in buying,” she said.

August’s tax cuts reduced sales taxes on properties that sold for less than K5 billion from 50pc to 12. Even houses priced in the stratosphere – above K5 billion – have only attracted sales tax of 15pc, according to an announcement from the Ministry of Finance and Revenue.